The role of Chief Financial Officers (CFOs) is undergoing significant transformation, with sustainability metrics and measurement emerging as a top priority in recent years. A survey conducted by Protiviti last year revealed that ESG (Environmental, Social, and Governance) metrics were the primary financial concern for CFOs. Now, with the Securities and Exchange Commission (SEC) approving new rules mandating sustainability reporting, CFOs are gearing up for the challenges and opportunities ahead.
Under the new SEC rules, publicly traded companies will be required to disclose their Scope 1 and Scope 2 emissions, along with quantifying climate-related risks and mitigation efforts. While the specifics of these regulations have sparked controversy among stakeholders, CFOs have been preparing for this development for the past two years.
Judson Aiken, senior director of risk and ESG solutions at AuditBoard, emphasized that most large companies are already reporting sustainability information. The new rules aim to standardize these disclosures, bringing sustainability reporting on par with financial reporting. Collaboration across sustainability, audit, risk, and compliance teams has been instrumental in building the foundations for internal controls over sustainability reporting.
As companies embark on this journey, CFOs play a crucial role in ensuring accurate and efficient reporting. This includes working with software providers to adopt the easiest and most accurate methods for measuring metrics like emissions and carbon mitigation factors.
Meanwhile, amidst these regulatory changes, companies like Turo are experiencing exponential growth. Turo, a vehicle-sharing marketplace established in 2009, has seen a surge in demand since the COVID-19 pandemic. Chuck Fisher, CFO of Turo, highlights the company's mission of putting the world's cars to better use by allowing owners to rent out their vehicles.
Fisher explains that Turo invested in its host community, platform, and team to facilitate growth. This included financial incentives for hosts and developing an onboarding training program. Despite challenges, such as downsizing during the pandemic, Turo has achieved profitability and filed for an initial public offering (IPO).
As CFOs navigate sustainability reporting and rapid growth, strategic resource allocation and risk management remain paramount. Fisher advises financial leaders to maintain a forward-thinking approach, focusing on long-term value creation and prudent decision-making.
The evolving responsibilities of CFOs encompass not only financial management but also sustainability reporting and driving growth in dynamic market environments. With the right strategies in place, CFOs can steer their companies towards sustainable and prosperous futures.
